Investing in Facebook: A comprehensive primer and analysis

Part 3

Why news feed changes led to Facebook’s lower organic reach

Investing in development

One of Facebook’s key strategies is prioritizing product development investments to create engaging interactions between its users, developers, and advertisers. It continues to invest significantly in improving its core products such as News Feed, Timeline, and Photos, developing new products, and enabling new platform apps and website integrations.

EdgerankEnlarge Graph

Facebook announced changes last month to its News Feed algorithm that will lead to lower organic reach for posts by pages. This move has invited criticism from page administrators, who saw their posts go from reaching about 16% of users who like their pages to between 2% and 3%. According to news reports, Facebook’s tweak wasn’t actually aimed at showing “higher-quality content” in the News Feed but bringing down the reach of brands that had pages on Facebook. These pages acted as free ads for the brands and are maintained by social media marketing companies. The tweaking effectively meant that brands wanting exposure will have to buy ads to make up for the lost reach.

In its announcement, Facebook said:

  • “People are connecting and sharing more than ever. On a given day, when someone visits News Feed, there are an average of 1,500 possible stories we can show. As a result, competition for each News Feed story is increasing. Because the content in News Feed is always changing, and we’re seeing more people sharing more content, Pages will likely see changes in distribution. For many Pages, this includes a decline in organic reach. We expect this trend to continue as the competition for each story remains strong and we focus on quality.”

Facebook’s algorithm uses a number of factors to establish which posts should be shown to users. Previously called EdgeRank, the algorithm now has more than 1,000 contributing factors, but it still focuses on three main influences: affinity, weight, and time decay.

“Affinity” is defined as a user’s relationship with the person or page that created the specific Facebook object—essentially, how much the user interacts with that person or page. Affinity is built by repeat interactions with a brand. Actions such as commenting, “liking,” sharing, clicking, and even messaging can influence a user’s affinity.

“Weight” is determined by the object type. For instance, whether it’s a photo, video, or link. Commenting is more involved and therefore deemed more valuable than a “like.” In the weighting system, comments would have a higher value than a “like.”

“Time decay” refers to how long the Edge has been alive. The older it is, the less valuable it is. An Edge is basically everything that “happens” in Facebook. Examples of Edges would be status updates, comments, likes, and shares.

Pandora (P) is another web company that relies heavily on its algorithms. To learn more about Pandora’s leading algorithms, see Must-know: Why Pandora has held on to dominant market share.

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